“As Europe’s major economies focus on belt-tightening, they are following the path of Ireland. But the once thriving nation is struggling, with no sign of a rapid turnaround in sight. …. Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.”

Lanny Davis, Clintonite PR flack, was in the news recently standing up for democracy by defending the coup in Honduras. Today, I read in the New York Times that Davis is now defending the democratic credentials of Teodoro Obiang Nguema Mbasogo, the beloved leader of Equatorial Guinea, so beloved that he wins his elections with over 90% of the vote. After experience of leading his country for more than three decades, “Mr. Obiang denied that large amounts of his country’s oil wealth had been stashed in bank accounts abroad and defended his long rule, saying, ‘My country is democratic’.”

One would have thought that the president’s word alone would be sufficient. Perhaps, he is spending the $1 million for the services of Mr. Davis as an act of charity to support the work of that humanitarian.

Here are two snippets regarding the replacement of public provision of services with less desirable private sources.

“Kaplan University has an offer for California community college students who cannot get a seat in a class they need: under a memorandum of understanding with the chancellor of the community college system, they can take the online version at Kaplan, with a 42 percent tuition discount. The opportunity would not come cheap. Kaplan charges $216 a credit with the discount, compared with $26 a credit at California’s community colleges.”

“For better or worse, the tough times for public colleges nationwide have presented for-profit colleges with a promising marketing opportunity.”

“In California, the memorandum of understanding also requires each community college taking part to sign a credit-transfer agreement with Kaplan — and most of the state’s 112 community colleges are not eager to do so. Thus far, Kaplan has no takers for its courses. “Faculty from across the state were uniformly irate and disappointed about the memorandum of understanding,” said Jane Patton, president of the Academic Senate for California Community Colleges, partly because faculty members were not consulted.” Continue reading →

I just read the Rolling Stone article about McChrystal. I think it’s a brilliant move on McChrystal’s part. There’s no way he can achieve a real victory in Afghanistan. Why not play the tough guy, get himself fired, and when things fall apart strut about claiming that had he been allowed to run things victory will be assured.

Epstein, Richard A. 2010. “BP Doesn’t Deserve a Liability Cap: The best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick.” Wall Street Journal (16 June).

“What’s needed going forward is a comprehensive legal strategy that addresses the risks though a combination of regulation before the fact and tort liability (and criminal sanctions where appropriate) afterwards. Tort remedies are essential to protect people (and their property) who do not have contractual relations with defendants from harms such as air and water pollution. The legal system should never allow self-interested parties to keep for themselves all the gains from dangerous activities that unilaterally impose losses on others — which is why the most devout defender of laissez-faire must insist, not just concede, that tough medicine is needed in these cases. The fundamental question here is one of technique: What mix of before and after sanctions will do the job at the lowest cost?”

“The first element in the mix is a no-nonsense liability system that fastens full responsibility on the parties who run dangerous operations, no excuses allowed. Accordingly, we have to be especially wary of statutory caps on tort damages.”

Yves Smith’s terrific ECONned, pointed to an ancient 1961 article from Time. The article suggests “a waning of controversy among economists,” which meant that the article reflected the milquetoast economics of the leading democratic economists and the less rabid attitude of the Republicans. Galbraith merited a brief mention in which the author noted that most economists reject his view.

“Walter Heller is usually tagged as a “liberal,” but he departs so often from what used to be liberal cliches that the identity tag is a bit blurred. A more descriptive label, one that he applies to himself, is “pragmatist.” That is the vogue word among economists today, the term that most of them use to label themselves and one another. When economists call themselves pragmatists, they mean that they are the opposite of dogmatists, that they are wary of broad theories, that they lean to the cut-and-try approach to public problems, and that they believe it is possible to improve the functioning of the economy by tinkering with it.”

Heller said, “My awareness of the seriousness of the situation is balanced by a conviction that we can do something about it — and without interference in the basic freedom of our capitalist system.” Continue reading →